On January 30th, 2009, the Second Circuit refused to enforce an arbitration clause contained in American Express Co. merchants’ agreement. In Re: American Express Merchants’ Litigation, No. 06-1871 (2d Cir. 2009). The clause would prevent merchants who accept the card from bringing class-action antitrust claims against American Express.
Like the Texas Supreme Court in In re Poly-America, L.P., the Second Circuit cited section 2 of the FAA, which provides that an agreement to arbitrate “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” However, here the court stressed that it did not rely on findings of unconscionability under state law, but instead, it based its holding on vindication of statutoty rights analysis.
For further commentary, see ADR Prof Blog, Morrison Foerster, and Marc J. Goldstein.
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